Venture Secrets—Building a Compelling Value Proposition for Your Research
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Venture Secrets—Building a Compelling Value Proposition for Your Research
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Slides from my March 25, 2015 NYU BioVentures talk: Venture Secrets—Building a Compelling Value Proposition for Your Research
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Venture Secrets—Building a Compelling Value Proposition for Your Research
- 1. @NYUEntrepreneur Venture Secrets: Building a Compelling Value Proposition for Your Research Frank Rimalovski Executive Director, NYU Entrepreneurial Institute Managing Director, NYU Innovation Venture Fund Instructor, NSF Innovation Corps (I-Corps) Mar 25, 2015
- 3. @NYUEntrepreneur Agenda 3 1. What makes for a successful startup? 2. What we used to believe 3. What we now know: The right way to start (up) 4. Benefits to this approach
- 4. @NYUEntrepreneur What makes for a successful startup?
- 5. @NYUEntrepreneur Commercialization Myth 5 Basic & Applied Research Scientific Discovery/ Invention/ IP Creation Venture Formation & Growth
- 6. @NYUEntrepreneurThe “valley of death” Commercialization Reality Basic & Applied Research Scientific Discovery/ Invention/ IP Creation Customer Discovery & Prototype Dev Business Model & Team Formation Venture Formation & Growth • Customer/market discovery • Engineering/prototypes • Mentors and advisors • Collaborative spaces • Business leadership • Legal counsel • Capital
- 7. @NYUEntrepreneur Two parts to Translational Medicine 1. Advancing the science/technology 2. Finding a repeatable business model u Current efforts focus on #1 u Successful efforts require both 7
- 8. @NYUEntrepreneur Answers are Outside Your Lab u You may be smartest person in your lab u Not smarter than collective intelligence of your potential customers, partners, payers & regulators u Can’t learn by reading papers or lectures u Experts are overrated You need to get outside your building
- 9. @NYUEntrepreneur It’s Bigger Than the Revenue Model u Testing hypotheses makes substantive changes to biz model before you do science/design o Define clinical utility o Who core & tertiary users/buyers/payers are o Sales & marketing process required for initial revenues and downstream commercialization o Data required for future partnerships/collaborations o Intellectual property risks o Regulatory pathways o Reimbursement strategies o Roles of partners u Affects your biological & clinical hypotheses 9
- 10. @NYUEntrepreneur Need to do this before finishing the science or building/designing the product
- 11. @NYUEntrepreneur Evidence-based Entrepreneurship (aka the Lean Startup) 11
- 12. @NYUEntrepreneur What We Used to Believe
- 13. @NYUEntrepreneur Startups are a Smaller Version of a Large Company
- 14. @NYUEntrepreneur Start with an Operating Plan and Financial Model
- 15. @NYUEntrepreneur
- 16. @NYUEntrepreneur All I Need to Do is Make the Forecast
- 17. @NYUEntrepreneur What We Now Know
- 18. @NYUEntrepreneur
- 19. @NYUEntrepreneur “Everyone has a plan until they get punched in the face!”
- 20. @NYUEntrepreneur
- 21. @NYUEntrepreneur Planning comes before the plan
- 23. @NYUEntrepreneur “More startups fail from a lack of customers than from a failure of product development.”
- 24. @NYUEntrepreneur24 So what do we do?
- 26. @NYUEntrepreneur A temporary organization designed to search for a repeatable and scalable business model A startup is…
- 27. @NYUEntrepreneur What is a Business Model? How a company creates value for itself while delivering products or services for customers
- 28. @NYUEntrepreneur What is a Business Model?
- 30. @NYUEntrepreneur
- 31. @NYUEntrepreneur Testing Hypotheses u Apply the scientific method to customer discovery 31 Observe phenomena Formulate hypothesis Test hypothesis via rigorous experiments Establish theory based on repeated validation of results Modify hypothesis PIVOT!
- 32. @NYUEntrepreneur Customer Development is how you search for the business model
- 33. @NYUEntrepreneur First test the problem, then test the solution Customer Development 33
- 34. @NYUEntrepreneur Value Proposition What Problem Are You Solving?
- 35. @NYUEntrepreneur Value Proposition describes the benefits customers can expect from a bundle of products and services
- 36. @NYUEntrepreneur Customer Segment Who Cares?
- 37. @NYUEntrepreneur Customer Profile Who are they and why would they buy?
- 39. @NYUEntrepreneur So where does my technology come in?
- 40. @NYUEntrepreneur It’s not about your technology! 40
- 41. @NYUEntrepreneur So where does my technology come in? Customers don’t care about technology They are trying to solve a problem Customer discovery is about identifying that problem & exploring how you could solve it
- 42. @NYUEntrepreneur Value Proposition What Problem Are You Solving?
- 43. @NYUEntrepreneur Key Questions for Value Prop u Problem Statement: What is the problem? u Technology / Market Insight: Why is the problem so hard to solve? u Product: How do you solve it today? u Competition: Who is delivering that solution? u Clinical utility: What level of improvement in efficacy/safety/cost/etc. is needed? u Market Size: How big is this problem?
- 44. @NYUEntrepreneur Customer Segment Who Cares?
- 45. @NYUEntrepreneur Define Customer Archetype u Who are they? o Position / title / age / sex / role u How/where do they buy? o Discretionary budget (name of budget and amount) u What matters to them? o What motivates them? u Who influences them? o What do they read/who do they listen to?
- 46. @NYUEntrepreneur What is your potential customer trying to get done? Jobs to be Done 46
- 47. @NYUEntrepreneur …they want a quarter-inch hole!" People don't want to buy a quarter-inch drill… SOLUTION (WHAT) JOB (WHY) Innosight LLC
- 48. @NYUEntrepreneur Who has what job to be done? 48
- 49. @NYUEntrepreneur “Make me efficient at my work” FUNCTIONAL “Convey my professional status” SOCIAL “Make me confident that I can get the job done” EMOTIONAL “Help me perform like a professional” JOB • Prestigeà show that I use the latest starting with my equipment • Valueà demonstrate my ability to recognize value • Confidenceà ensure that I can count on my equipment • Versatilityà give me the ability to work in different conditions • Accuracy à the ability to only effect targeted tissue • Speedà help me complete the task quickly Innosight LLC
- 51. @NYUEntrepreneur put yourself in the customers’ shoes
- 52. @NYUEntrepreneur Who’s the Customer in a Company?
- 54. @NYUEntrepreneur Who’s the Customer in a Company?
- 55. @NYUEntrepreneur Who’s the Customer in a Company?
- 56. @NYUEntrepreneur Who’s the Customer in a Company?
- 57. @NYUEntrepreneur How Do They Interact to Buy? u Organization Chart u Influence Map u Sales Road Map
- 59. @NYUEntrepreneur Customer Ecosystem of people you need to understand, satisfy and appeal to in order to get them to buy your product.
- 60. @NYUEntrepreneur Technology Lifecycle Adoption Curve 60
- 61. @NYUEntrepreneur Your Business Model Will Change… 61
- 63. @NYUEntrepreneur Case Study: The Smart Needle Source: Paul Yock, NIH I-Corps 2014
- 64. @NYUEntrepreneur Great concept: transducer inside needle …just listen to localize blood vessel Source: Paul Yock, NIH I-Corps 2014
- 65. @NYUEntrepreneur Source: Paul Yock, NIH I-Corps 2014
- 66. @NYUEntrepreneur What’s the need? A way to localize arteries and veins to improve the speed and accuracy of needle sticks Source: Paul Yock, NIH I-Corps 2014
- 67. @NYUEntrepreneur A way to localize arteries and veins to improve the speed and accuracy of needle sticks Need statement: • fast • accurate • needle size no bigger than current • maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
- 68. @NYUEntrepreneur What we missed! The existing approach was cheap! Source: Paul Yock, NIH I-Corps 2014
- 69. @NYUEntrepreneur A cost-effective way to localize arteries and veins to improve the speed and accuracy of needle sticks Need statement: • (where is there real value in time saved?) • Accurate • Needle size no bigger than current • Maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
- 70. @NYUEntrepreneur For most patients it’s not worth it to add the expense of extra technology to save a little time The real need is in high-risk patients: trauma, acute MI, neonatal ICU amico.com Dovemed.com Source: Paul Yock, NIH I-Corps 2014
- 71. @NYUEntrepreneur A cost-effective way to localize arteries and veins to improve the speed and accuracy of needle sticks in high-risk patients Need statement: • Less than $25 additional per patient • Accurate • Needle size no bigger than current • Maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
- 72. @NYUEntrepreneur We missed something else! The technique must be user-friendly and easy to learn Source: Paul Yock, NIH I-Corps 2014
- 73. @NYUEntrepreneur A cost-effective way to localize arteries and veins to improve the speed and accuracy of needle sticks in high-risk patients Need statement: • Less than $25 additional per patient • Require minimal new skill & training • Accurate • Needle size no bigger than current • Maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
- 74. @NYUEntrepreneur The Bottom Line Validating your need at the outset is the single most cost-effective strategy for minimizing risk! It provides the basis for all subsequent technical, clinical and business strategy decisions Source: Paul Yock, NIH I-Corps 2014
- 75. @NYUEntrepreneur I’ve figured out who I’m selling to and what pain point I’m solving! I’m ready to start building and selling… Right?!
- 76. @NYUEntrepreneur ? ✔ ✔ ? ? ? ? ? ? Not so fast!
- 77. @NYUEntrepreneur ? ✔ ✔ ? ? ? ? ? ? Especially in the Life Sciences… You can’t have a valid business until you test both sides of the canvas!
- 78. @NYUEntrepreneur Key Activities What’s Most Important for the Business? • Pre-clinical studies • Clinical Trials • FTO • Regulatory Pathway • CPT Coding
- 79. @NYUEntrepreneur Key Resources What are your most important assets? • Data package • Intellectual Property • Non-dilutive funding
- 80. @NYUEntrepreneur Key Partners Who are your Partners and Suppliers? • Patent counsel • Clinical sites • CROs/ designers • Contract Mfg • Foundations • Patient Adv Groups How will these relationships work?
- 81. @NYUEntrepreneur Channels How does your product get to customers? • Distributors • Direct sales • Business development
- 82. @NYUEntrepreneur Customer Relationships How do you Get, Keep and Grow Customers? • SAB • KOLs • Papers • Conferences • PR
- 83. @NYUEntrepreneur Revenue Streams How do you make money? • Reimbursement? • Capital purchase/lease • ???
- 84. @NYUEntrepreneur Cost Structure What are the Costs and Expenses?
- 85. @NYUEntrepreneur The Minimum Viable Product Customer Development 85
- 86. @NYUEntrepreneur Help start the process of learning as quickly & cheaply as possible The Minimum Viable Product 86
- 90. @NYUEntrepreneur Why create an MVP? u Answer questions & generate new ones u Validate your assumptions u Compare alternatives u Fail early & cheaply u Visualize your ideas & share with others o Team o Customers o Investors 90
- 91. @NYUEntrepreneur Why use this approach?
- 92. @NYUEntrepreneur 1. Find go-to-market strategy… 92
- 93. @NYUEntrepreneur …and do it more quickly 93
- 94. @NYUEntrepreneur 2. Design an MVP 94 Start the process of learning as quickly & cheaply as possible Minimum Viable Product
- 95. @NYUEntrepreneur 3. Build a Team 95 “Co-founder skills are the first derivative of the business model canvas” SteveBlank.com
- 96. @NYUEntrepreneur 4. Raise Funds 96 POC Grants Compe99ons Seed Funds
- 97. @NYUEntrepreneur 5. Launch a better business 97
- 98. @NYUEntrepreneur What’s next? Leslie eLab • 6,000 sq ft NYU Startup Hub • Daily workshops & speakers • Collaborative workspaces • Prototyping lab • Entrepreneur-in- residence • 16 Washington Pl 10am-10pm M-F Innovation Corps (I-Corps) • Prior NSF (& soon NIH) grantees • 7-weeks • $50,000 for NSF I-Corps • Immersive, experiential startup training Rolling Applications 5-Day Lean Launchpad Class • 5-day immersive class (for credit) • Grad students • Co-taught by Steve Blank • Applied learning for your startup • Team-based Offered last week in Aug (24-28) Summer Launchpad Accelerator • 10-week program • For graduating students • $7,500 & space • Entrepreneur & investor mentors • Lean Startup bootcamp Apps due Apr 17 98